An Kai from the World Gold Council: Multiple Factors Provide Positive Support for Gold Price Upside

Market performance has clearly shown that gold has become a global asset. Gold prices are no longer solely influenced by European and American markets and Fed policies, but are also affected by demand from Asian markets and global central bank reserve policies.

Regarding the performance of the gold market in the second half of the year, Artigas provided an analysis based on the World Gold Council's analytical framework, which includes four key drivers: economic expansion, risk and uncertainty, opportunity cost, and momentum.

From an economic expansion perspective, global economic growth is highly positively correlated with gold consumption, investment, and industrial demand. With the rapid development of emerging technologies such as artificial intelligence, demand for gold in technology is increasing, while consumer demand, investment demand, and industrial demand have become important supports for gold prices.

From the risk and uncertainty perspective, increasing global geopolitical risks, macroeconomic volatility, and policy uncertainty are heating up market demand for safe haven assets, directly boosting demand for gold allocation. Conversely, as risk sentiment in the market warms and uncertainty decreases, gold investment demand will undergo periodic contractions.

From the opportunity cost perspective, Europe and the US currently maintain a high interest rate environment, which increases the holding cost for gold as a non-interest-bearing asset. In contrast, interest rates are relatively low in Asian markets, so the opportunity cost for investors holding gold is lower, making gold investment and consumption willingness in Asian markets higher over the long term compared to Europe and the US.